The New Era for Internal Auditing as the "Corporate Conscience"
Internal Auditors are our vital watch dogs that must protect the integrity of the U. S. Free Enterprise system.
Philadelphia, PA (PRWEB) November 11, 2009
In the past decade, we have witnessed several profound pieces of legislation, including the Sarbanes-Oxley Act of 2002, the Emergency Economic Stabilization Act of 2008, and the American Recovery and Reinvestment Act of 2009” (the "Acts"). The cause for these Acts and the subsequent government regulation has been the fundamental lack of integrity, governance, and risk management in our "Free Enterprise" system. Government intervention in business is nothing new and dates as far back to The New Deal Era of the 1930s, which established a complex package of government programs to provide economic relief, recovery, and reform during the depression. There is a wide range of views as to the success of The New Deal; however several key initiatives, such as the Securities and Exchange Commission (“SEC,”) the Federal Deposit Insurance Corporation (“FDIC,”) and the Federal Housing Administration (“FHA”) have endured the test of time and still today serve as influencers of economic stability.
The Acts were government reaction to a common theme of failure; identifying and responding to the strategic, operational, fraud, and financial risk inherent within companies, industries, and our economic “eco-system.” While the details of the most recent Acts unfold, there is one certainty that the future holds; qualified Internal Auditors will be vital to the long-term sustenance of our Free Enterprise system, as the restructuring of internal control systems will play a significant part in the reform that lies ahead.
Today, more than ever, Internal Auditors, Management, and Corporate Directors are faced with the challenge of identifying and responding to risks that threaten Company vitality. Historically, regulatory requirements have not set definitive standards of quality for the internal audit activity or certification requirements for its professionals. At this time, it is unlikely that a regulatory rule would enforce definitive quality or certification standards; however it is likely that Corporate Directors and Management will implement programs to improve the effectiveness of their internal audit activity and training programs. These programs will improve the competency of their internal “watchdogs.”
While there are a variety of audit-related certifications available, a few of the more notable certifications include the CIA®, CISA®, and the CFE®. These acronyms are finding their way into the Board room, helping Corporate Directors and Management set standards to measure the competency and qualifications of those professionals responsible for sustaining internal control. The Certified Internal Auditor® (CIA®) designation is the only globally accepted certification for internal auditors and remains the standard by which individuals demonstrate their competency and professionalism in the internal auditing field. The Association of Certified Fraud Examiners (CFE™) is the world's premier provider of anti-fraud training and education. The Certified Information Systems Auditor (CISA®) is renowned as the globally recognized achievement for those who control, monitor and assess an organization’s information technology and business systems.
A 2009 market trend has proven restrictive training budgets in response to the current economic crisis; however more progressive thinking organizations are investing in the talent of their internal audit and control professionals. The American International Group, Inc. (“AIG”) Internal Audit Division is among one of these progressive thinkers as they are piloting an on-site CIA® training program for a select group of auditors. Another developing trend in certification is college and university program offerings. The IIA® has partnerships with over 35 institutions throughout the country that offer a comprehensive CIA® training program. Villanova University offers a weekend CIA® training program to accommodate the time-sensitive professional. This program has attracted executives, managers, and associates from Fortune 1000 companies and public accounting firms, which provides a unique 360°learning environment. The CFE® and CISA® also have a variety of training venues.
While we continue to endure the challenges of these tough economic times we must recognize that more government regulation is inevitable and will, in all cases, require some degree of change to internal control systems. Those companies that make this recognition will be prepared to deploy qualified resources in response to these changes to sustain focus on strategic business operations. As companies embrace this ideology we will continue to see the trend of increased audit-related certification as a means for Boards and Management to not only evaluate and measure internal control excellence, but to maintain existence. The author of this article is Mr. Michael Brozzetti, President of Boundless LLC, a Philadelphia-based firm Boundless LLC specializing in enhancing Internal Audit Quality, Productivity, and Value. Mr. Brozzetti serves as an adjunct professor with Villanova Universty.
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